Asian stock markets suffered a fresh mauling yesterday, with Tokyo plunging to a four-year low on growing doubts about whether a Wall Street bailout package can stem the global financial crisis.
Investors were spooked by signs of escalating problems in Europe after Germany’s fourth biggest bank had to be rescued over the weekend. The yen soared as investors unwound risky bets.
Tokyo’s Nikkei-225 index ended down 4.25 percent as Sydney lost 3.3 percent and Seoul tumbled 4.3 percent. Hong Kong was 3.4 percent lower by midday while Shanghai dropped 3.8 percent.
“The market is not convinced that the US bailout package can protect the economy from the financial crisis,” Toyo Securities strategist Ryuta Otsuka said.
In an effort to keep credit flowing, Japan’s central bank pumped emergency funds into the short-term money market for a 14th straight business day, pouring in 1 trillion yen (US$9.5 billion) in the morning.
Investors dumped shares after US stock markets fell sharply on Friday, despite US congressional approval of a US$700 billion bank bailout.
Dealers said declines reflected worries that the plan would not be a panacea for the broad economic and banking woes in the US.
Underscoring the worsening conditions in the world’s largest economy, 159,000 US jobs were lost last month, government figures showed.
“The approval of the financial rescue plan failed to bolster market confidence. Pessimism towards the global economy is running deeper,” said Young Wang, an analyst at Yuanta Securities Investment Consulting (元大投顧) in Taipei, where stocks ended down 4.1 percent at a four-year low.
As the US-born financial crisis takes a stronger grip in Europe, the German government agreed an emergency rescue package of 50 billion euros (US$68 billion) for Hypo Real Estate (HPE), late on Sunday before markets opened in Asia.
It also announced an unlimited guarantee for personal savings deposits.
Given the various economic conditions in each of the eurozone member countries, “it looks difficult for authorities to take dramatic and quick action like the US,” Barclays Capital analysts wrote in a note to clients.
Markets were looking ahead to a meeting on Friday of finance chiefs from the G7 rich nations, waiting for any announcements on coordinated action such as liquidity injections or interest rate cuts, dealers said.
A speech today by US Federal Reserve Chairman Ben Bernanke will also be closely watched for any clues on the possibility of a US interest rate cut.
The seizure of one of the largest known mercury shipments in history, moving from mines in Mexico to illegal Amazon gold mining zones, exposes the wide use of the toxic metal in the rainforest, according to authorities. Peru’s customs agency, SUNAT, found 4 tonnes of illegal mercury in Lima’s port district of Callao, according to a report by the non-profit Environmental Investigations Agency (EIA). “This SUNAT intervention has prevented this chemical from having a serious impact on people’s health and the environment, as can be seen in several areas of the country devastated by the illegal use of mercury and illicit activities,”
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
DIVERSIFYING: Taiwanese investors are reassessing their preference for US dollar assets and moving toward Europe amid a global shift away from the greenback Taiwanese investors are reassessing their long-held preference for US-dollar assets, shifting their bets to Europe in the latest move by global investors away from the greenback. Taiwanese funds holding European assets have seen an influx of investments recently, pushing their combined value to NT$13.7 billion (US$461 million) as of the end of last month, the highest since 2019, according to data compiled by Bloomberg. Over the first half of this year, Taiwanese investors have also poured NT$14.1 billion into Europe-focused funds based overseas, bringing total assets up to NT$134.8 billion, according to data from the Securities Investment Trust and Consulting Association (SITCA),
Taiwan’s property transactions in the first half of this year fell 26.4 percent year-on-year to about 130,000 units, as credit controls and mortgage restrictions dampened demand, data from the Ministry of the Interior showed yesterday. Keelung saw the steepest decline, with transactions plummeting 45.6 percent to just 2,041 units — the lowest since the ministry began its survey in 2006. In contrast, Miaoli County was the only region to experience year-on-year growth, with transactions rising 2.4 percent to 3,229 units. Great Home Realty Co (大家房屋) attributed the increase in deals in Miaoli, particularly Jhunan (竹南) and Toufen (頭份) townships, to spillover demand
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